An extremist, not a fanatic

June 27, 2010

Duncan Smith's daft idea

Iain Duncan Smith is doing a great job at the DWP - if DWP stands for Department of Witless Policies. His new wheeze is to offer “incentives” for people in social housing to move to where there are jobs. There are four issues here:1. Lots of jobs are short-lived. Even in good times, one job in seven is destroyed every year. Over a quarter of low-paid jobs last less than a year. And one study found that 42% of new jobs last less than 12 months. This means that many of those who do move will find themselves out of work shortly afterwards.2. And they’ll be a long way from their friends as well. This matters, because large social networks help people back into work - as they learn of job openings from friends. In this sense, IDS’s proposal might not reduce unemployment much overall, as it’ll increase the duration of unemployment for those who move house and then lose their jobs.3. Moving away from one’s friends reduces happiness. Nattavudh Powdthavee has quantified this (pdf). He’s calculated that the difference in happiness between a person who sees their friends and relatives less than once a month and one who sees them most days is roughly as great as the difference in happiness between the unemployed and those in work. This means that, for the average unemployed person, moving into work and losing close social networks is neutral for happiness. In this sense, IDS’s idea fails to promote the general well-being which David Cameron has advocated - and is certainly inferior to job creation in areas of high unemployment. I’ll concede, though, that there’s a selection effect here. If IDS offers only genuine incentives for the unemployed to move, then those who take up the offer will be those who value working highly and friends (if they have them) lowly, so aggregate happiness will increase. This, however, assumes that IDS is true to his word and offers only carrots rather than threats, and that people are good predictors of their own well-being. Both assumptions are doubtful.4. If large numbers of people move into areas where there is work, there will be “pressure on public services” and a potential erosion of social capital. But these are exactly the objections some people have to immigration. Quite how one can oppose immigration and favour IDS’s proposal is unclear - unless, that is, you‘re a racist.There is, though, one effect of his idea. Insofar as people move from areas of high unemployment to low unemployment, rents and house prices will rise in the latter. I suspect, then, that IDS is pursuing pure Thatcherism - he wants to increase house prices in Tory-supporting areas.

Comments

More fundamentally, there's the question of which homes IDS thinks these people are going to be moving to. Funnily enough, after years of Right to Buy and piddling amounts of new social housing being built, there isn't much of it left any more and what does remain is in very high demand, particularly in 'places where the jobs are'. If you want someone to move in, you'll have to persuade the incumbents to move out, and generally they really don't want to (plus they're not dying off at quite the same rate anymore, rather inconveniently). Ministers always say they want to improve mobility within social housing, and they always come up against the problem of scarcity, and then they give up.

Or Maybe IDS thinks he can move people out of social housing and get them renting in the private sector. But in order to be able to afford to rent in 'places where the jobs are', they're going to need a lot more housing benefit. Which Osborne just took an axe to.

About the only group of people I know who make a success of this nomadic job chasing are academics (like me). They are relatively well paid for it, though. But I've come to the opinion, after a number of job shifts, that it's just not fucking worth it.

Arguments 1 and 2 seem pretty sensible. (3 is a bit bizarre - are you saying government should put barriers in the way of people moving, because it might make them unhappy? Maybe that's the secret rationale for stamp duty.)

But why the need to argue that all those who think immigration should be controlled are racists? I thought the debate got beyond that a while ago.

If I've understood you, those critics of recent immigration policy (which includes 4 out of 5 Labour leadership contenders) can only absolve themselves of racism if they also think that no people should ever move from where they currently are to pursue opportunities. So they have a choice of being either racists or nutters.

If you believe 'pressure on public services in high net migration areas' is a valid argument against encouraging immigration, it must also be a valid argument against encouraging internal migration.

There are, possibly, ways in which you can support one and not the other without being racist, but given William of Ockham, the onus is on the people in that group to explain why the obvious inference shouldn't be drawn...

So 'Pablopatito' is a lover of institutional insecurity is (s)he? Nothing quite as bracing as having an insecure job and the opportunity of a quick eviction to spice the job search, is there? Perhaps 'Pablopatito' has tenure, or similar & thereby speaks with the full authority of the comfortably off. Truly the New Tories have shifted the economic ground which is no great triumph as the Great Helmsman has watered the patch for years.

I'm not a lover of anything! I'm just saying its a fair point. I'm a private sector renting economic migrant who can be evicted with 8 weeks notice at my landlord's whim and sacked with 4 weeks notice at my employer's whim. It sucks but that's not the point.

If we had more social housing AND greater security of tenure in private housing, maybe we would overcome the problems that IDS has merely pointed out.

I appreciate its unlikely that this is what the Tories have in mind, but that doesn't make IDS's observation false.

AJ, point 3 is perfectly reasonable. It states that moving away from your established social network (friends, family, etc.) reduces happiness. If this is not sufficiently offset by the increased happiness gained by well remunerated and satisfying employment, net unhappiness is the result. This probably explains why it is usually young, single, ambitious people who are most likely to travel to find work. Especially if they have to live in expensive, 3rd rate accommodation.

Given that the southeast is already suffering from over population effects, the wisdom of encouraging yet more people to move into the area seems deeply questionable.

And his colleague Eric Pickles has removed the strategic planning and statutory requirement for local councils to build homes. Down south where I am, this means far fewer new houses built and house price inflation as councils down south simply do not want to build new houses - they would be voted out. There's something like a waiting list of 4m for social housing nationally too - so there's not much scope for people to move into spare social housing (because there isn't any).

And then there's no money to build the infrastructure for the new settlements - schools, roads etc.

The result will be an overloaded, creaking infrastructure down south with massive house price inflation and pressure on public services.

The previous govt, ok flawed, but they had thought and acted pragmatically when it came to strategic management of things like housing and infrastructure.

1. He is trying to get people to move to areas where there is work from areas where there is not. If a few lose their jobs after a few months, they will still be in a job-rich area.

2. This will not be true in areas where unemployment is entrenched. Jobless friends are likely to keep you jobless, just as druggie friends are likely to keep you on drugs.

3. They can make new friends. With the higher self-esteem that comes with doing a job, they may make higher-quality friends (i.e. the kind who have jobs).

4. It is not racist to recognise that their are bonds of shared citizenship and culture between British people. These make British people more likely to accept added strain placed on public services by other British people than by immigrants.

Arguments 1-3 assume the people IDS is trying to help are nice, middle-class people like you. Argument 4 is an attempt to brand as racist people who are inclined to care for their countrymen.

All of those arguments are anti-immigration arguments for the immigrant.

I think it displays a certain racism or lack of empathy with others from outside yout own culture to argue that it is wrong to encourage citizens of your own country to move to where the jobs whilst at the same time arguing in favour of economic immigration because it boosts the economy.

Or are immigrants somehow immune from the temporary nature of many new jobs, and magically don't need any social network because they're somehow not like (less human than?) the natives?

You can't have it both ways. Either GDP is the be all and end all, in which case the nation's jobless and every potential immigrant willing to make his or her way here should be encouraged to move to the already overcrowded, highly expensive areas where the jobs are clustered because it can boost the country's GDP as a whole and having a job will boost their own personal income (irrespective of whether it boosts or decreases their spending power in real terms), and after all they will all be paying tax, so more infrastructure to support them will be financeable and entrepreneurs are ever inventive, so we needn't take into account any apparent issues with lack of existing infrastructure or overcrowding.

Or GDP is not the be all and end all and we need to look at wider arguments when assessing possible policies.

I'm struggling to see how a lot of your previous posts don't support IDS's arguments here and how your arguments in this post don't counter your previous pro-immigration posts. I suppose it all comes down to prejudice. You couldn't support anything said by a Tory and deep-down, you can't help but feel that there should be one way of treating citizens of this country and another for those who come from elsewhere.

John B. If that's logic, then it's playground logic. I think you're saying that the only logically consistent positions to hold without being racist are either (1) that there shouldn't be any restrictions on people's movements anywhere, or (2) people's movements should be totally restricted. If that's correct you must be claiming to be one of a tiny handful of people who aren't racist. I suspect you like that thought, but sadly for you it's not true because both positions are of course crazy. If you want to know why, you can start by putting George Borjas on your reading list, or by trying to think on your own about a rather complicated cultural and empirical issue using something more than schoolboy logic and tired accusations of racism.

1. This means that many of those who do move will find themselves out of work shortly afterwards.

Not necessarily. Sure, many jobs are short-lived, but if there are lots of jobs in location A, and none in location B, and that doesn't change with time, then it's always right to move to A. Even if your job only lasts a few months, you'll now be in A, where there are lots of jobs available.

2. This depends on your friends. If your friends are all industrious and employed, you might be better off staying put. If your friends are unemployed too, they're not going to be much use at helping you find work.

3. Sure, but this is transitory. When you move to a new place, you will make new friends, and so happiness will increase again. Like point 1, this is only valid if you assume jobs appear randomly around the country. If there is a location A which consistently has more available jobs, you should take the happiness hit and move away from your friends, if you want to maximize your long-term integral of happiness.

4.Quite how one can oppose immigration and favour IDS’s proposal is unclear - unless, that is, you‘re a racist.

It doesn't have to be racist at all. I'm already paying for unemployed people in our unemployment hotspots. If those people move to a different part of the country and find work, I benefit because my taxes have to support fewer people.

If someone immigrates to take the job, I don't get that benefit. (In each case, I get the same economic benefit that that person's employment contributes to the local economy, tax base and so on.) So it's in my naked self-interest for jobs to be filled by unemployed UK residents rather than immigrants.

This argument has nothing to do with not liking foreigners with their strange ways and funny smells - it holds just the same if the UK residents are Somalis who have been granted asylum and the immigrants are the white English-speaking grandchildren of emigrants to Australia, assuming the Somali and the Australian had the same skills.